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Chapter 5: Organizational Strategy (Grand Strategies (Growth, Stability,…
Chapter 5: Organizational Strategy
Sustainable Competitive Advantage
Competitive advantage
Sustainable competitive advantage
Assessing Need for Change
Top-Level managers are often slow to recognizes need for change
Managers should look for strategic dissonance to improve speed and accuracy of determining need for change
SWOT
Internal
Strengths
Weaknesses
External
Opportunities
Threats
Internal Environment
A distinctive competence is something a company can do better than its competitors
Core capabilities are less visible factors that determine how efficiently inputs can turned into outputs
External Environment
Strategic Group
Core Firms
Secondary Firms
Choosing Strategic Alternatives
Risk-avaoiding
Risk-taking
Portfolio Strategy
A corporate-level strategy that minimizes risk by diversifying investments among various businesses or product line
Standard strategies
Diversification
Acquisiton
Unrelated diversification
BCG Matrix
A portfolio strategy that managers use to categorize their corporation's businesses by growth rate and relative market share, helping them decide how to invest corporate funds
Related Diversification
Different business units share similar product, manufacturing, marketing, technology, or cultures
Key is to acquire or create new companies within core capabilities that complement the core capabilities of businesses already in the corporate portfolio
Grand Strategies
Growth
Stability
Retrenchment
Recovery
Positioning Strategies
Protect your company from the negative effects of industry-wide competition and to create a sustainable competitive advantage
Cost leadership
Differentiation
Focus Strategy
A company uses either cost leadership or differentiation to produce a specialized product or service for a limited specifically targeted group in a particular region or market
Adaptive Strategy
Defenders
Prospectors
Analyzers
Reactors
Direct Competition
Rivalry between two companies offering similar products and services that acknowledge each other as rivals and take offensive and defensive actions.
Market commonality
Resource similarity